Mar. 3, 2017
Ignorance Is Not Bliss: Demystifying Executory Contracts in Bankruptcy Cases
By Charles M. Tatelbaum
An executory contract can create havoc for the unsuspecting counterparty.
Most businesses are (reluctantly) required to deal with customers, suppliers and counterparties to agreements that enter bankruptcy proceedings, yet there is a great lack of knowledge as to how the concept of an executory contract can create havoc for the unsuspecting creditor/counterparty. Recent litigation in Delaware involving the sporting goods retailer Eastern Outfitters LLC (Eastern Mountain Sports and Bob’s Stores) points to some of the issues.